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Partnership Ceased Farming Trade For Three Year Period For Loss Relief Purposes

By Mark McLaughlin, December 2014
Summary

A husband and wife partnership had ceased its farming trade for a three year period for the purposes of counting the number of years of continuous losses, when considering the income tax farming loss relief provisions against general income in ITA 2007, ss 67, 68.

Background

Following an enquiry, HM Revenue and Customs (HMRC) challenged the appellants’ claim to set farming losses against other income in the tax year 2010/11, and raised discovery assessments to deny a similar offset of losses in the tax years 2008/09 and 2009/10. The appellants appealed.

The First-tier Tribunal (FTT) had to consider two main issues. The first was whether the appellants (a husband and wife partnership operating a farm) actually ceased their farming trade altogether between early 2001 and 2004. If they did, it would almost certainly follow that the provisions of ITA 2007,
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